“Unexpected income”: alarm in the red circle for the government’s progress with a new tax

“Unexpected income”: alarm in the red circle for the government’s progress with a new tax

Alarm bells began to ring in the red circle. The country’s leading business associations have warned that the “unexpected income” tax, which has already been planned by the Minister of Economy, Martín Guzmán, and which would add greater tax burden on the private sector of the economy, It will have an impact on investment, business and quality job creation.

The Argentine Business Association (AEA), the Argentine Industrial Union (UIA), the Chamber of the Petroleum Industry of the Argentine Republic (Ciara) and the CEC (Cereal Export Center), the Chamber of Commerce and Services (CAC), between the others, questioned the official initiative announced by the head of the Palacio de Hacienda and the president Alberto Fernández.

After yesterday evening’s meeting of the Board of Directors, the EEA decided to send its opinion on Guzmán’s proposal today through a press release sent to the media. “Argentina must return to the path of sustainable economic and social development. This is why it is essential to create the conditions so that small, medium and large enterprises can make investments that generate employment and increase production and exports “. indicated in the entity that groups companies such as Techint, Arcor, Grupo Clarín, Laboratorios Bagó, Grupo Miguens, La Anónima, IRSA, Santander, PAE, Mercado Libre, Toyota and Globant, among many other important companies.

“The creation of new taxes – such as the recently announced ‘unexpected income tax’ – goes in the opposite direction to that indicated. In Argentina, 165 taxes are already in place and the tax burden on the formal sector of the economy is very high and has grown strongly over the last 20 years, easily exceeding the regional average. With less taxes we will generate more investment and employment ”, they closed in that association.

“An extra tax means that you send a message to all people and business people that starting to do business in Argentina will be increasingly difficult,” EEA President Jaime Campos said in a radio statement this morning. . . “The question we must ask ourselves in Argentina is whether we are all working to create increasingly attractive conditions for investments in the country (…) the message [que envía el Gobierno] is: ‘Sir, before doing business in Argentina, look at it 400 times, because every day they impose a new tax’ “, He added.

In the UIA, they said, there is “a lot of fever”. Even if they hope to know the small print of the project – which would be a law sent to Congress – in the body they believe that “no more taxes can be added”. Industry today is showgirl of the government. Perhaps that’s why hardly anyone raised their voices at yesterday’s meeting of the Governing Board of Sector and Regional Representatives, except for some interrogations headed by San Juan, particularly about the situation in which the mining industry would remain. “There are spies” others have cautiously reported the arrival of this report to senior official circles.

Others attribute some silences to the fate of each of the UIA companies regarding the payment or not of a new tax, which they qualify as “Tax on the disguised wealth”. There are those who think that Guzmán’s strategy is simply to run into the opposition’s no to ingratiate himself with Christianity in the midst of the internal one.

The entity’s management will have some more details when the minister returns from the spring meeting of the International Monetary Fund (IMF) and the World Bank (WB) in Washington. The Fund often repeats to the minister that it needs to improve incentives for the private sector. The UIA will present the “white paper” with proposals for the sector to the President on Monday. Fernández may be able to give you an outline of the new industrial tax.

In a statement sent to the media, the UIA warned that there is “worry” for the possible creation of an additional rate for businesses. “In this regard, it was analyzed how a new increase in the tax burden on the formal sector of the economy will affect investment and the negative impact it will have on activity and employment,” they estimated.

The note adds that the entity’s tax policy department and the CEU – its research center – will analyze the scope of the measure and its productive impact. On the other hand, at that meeting a report was presented which – explained the official statement – “accounts for the distortions and the impact on production and exports produced by IRPEF and the proliferation of municipal rates throughout the already large territory of the country “.

“The Council expressed its concern about the accumulation of taxes between the nation, provinces and municipalities, and the cost of administrative bureaucracy”, affirmed to THE NATION the president of the UIA, Daniel Funes de Rioja, who said he hoped to know more details of the project.

According to the “Tax Vademecum” published last Sunday by Iaraf, directed by Nadin Argañaraz, of the analysis of the legislation for 2022, the existence of 165 different taxes in Argentina has been identified. “Given the 2021 collection of VAT, Contributions and Contributions to Social Security, Income from individuals, Income from companies, Export duties, Debts and bank credits (check) and the provincial tax on Gross Income, 82% of the tax consolidation ”Said the report.

of its new fiscal policy, Guzmán reported that it will only apply to companies with net taxable profits of more than $ 1,000 million for the year. and he said that if the “windfall” of the war in Europe is channeled towards productive reinvestment, it will be paid less. “There are sectors of the economy benefiting from the unexpected profits of the war and billions of people around the world suffering the consequences of price increases”, Guzmán said this today in a forum of G-20 ministers.

“From Ciara-CEC we express our deep concern before the proposal of the new tax announced by Martín Guzmán ”, stressed the oilseed industry. “Although the war has generated an increase in the price of some goods agriculture has also done so with production costs, even more so in our country. Added to the shortage of critical supplies, they have neutralized, or more, the relative benefits of agricultural products, “the entity added in a tweet thread.

In that same message on the networks, it was recalled that the government “mentions” exports of wheat and corn. In addition, he asked Congress to discuss the “distortions” generated by official politics. “Argentina does not need more taxes. On the contrary, what is needed is to remove the handbrake from production and investments. for more work. We will be available to work on a proposal of this type, if the Government calls us ”, they indicated.

“We disagree with any new levies. The tax burden is already excessive. In this way, it only generates more discouragement to invest, ”said Mario Grinman, president of the CAC. “The problem in Argentina is that there is no investment and no jobs are created. The only thing that has grown in the last ten years is the civil service. Rulers have to start thinking about other things; Not everything is solved by raising taxes. If we don’t cut expenses, if we don’t tidy up the house, every day we will be a little more decadent “, said the entrepreneur.